Business Standard

Banks, businesses debate decriminalising dishonouring of cheques

The government wants to change the law, more so in recent months as part of reforms helping business

cheques, banking, banks, lending, company, firms, shares, stocks, shareholding

The UK, the US, and France have made cheque bounce a non-criminal offence. | illustration: Binay sinha

Sudipto Dey New Delhi
A recent note by the ministry of finance seeking views from different stakeholders on whether dishonouring of a cheque should be de-criminalised has led to a raging debate. Bankers and lenders are expectedly opposed to the idea, fearing loss of deterrence, and diminishing sanctity and credibility of cheques as an instrument of transactions. A large section of the business community considers the criminal liabilities and penalties associated with dishonouring of a cheque more as an instrument of harassment by lenders.

The government over the years has been sympathetic to the idea of de-criminalising cheque-dishonour offence, more so in recent months

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First Published: Jul 26 2020 | 7:00 AM IST

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